Sustainability Management Structure

PHC Group has established a Sustainability Committee chaired by the Representative Director, President and CEO and including the Corporate Officers and Heads of Business Units. The Committee identifies materiality topics, determines KPIs and targets, evaluates performance, directs improvements, and manages, discusses, and approves sustainability-related activities including those necessary under new regulations and guidelines. Reports, discussions, and deliberations made by the Sustainability Committee are submitted and reported to the Executive Committee and the Board of Directors to the extent required in the “Rules on Group Rules Management”. The Sustainability Committee seeks to meet four times a year and report its deliberations to the Board of Directors at least once a year. The Board of Directors manages and supervises appropriateness, effectiveness, and risks of sustainability activities. Sustainability matters are directed to the Sustainability Team, comprised of leaders selected from each Business Unit and head office functions, to make recommendations on a structure and process that will enable the entire Group to implement sustainability activities including initiatives to achieve the targets for each KPI.

Risk Management

PHC Group manages risks related to sustainability activities based on the “PHC Group Risk Management Policy,” which stipulates basic risk management policies, structure, and initiatives across the Group. Each year, the Group identifies critical risks by examining risk areas such as regulations and technologies related to the environment, natural disasters, and geopolitics, as well as risk areas that may affect business continuity, such as cyber security and technology transfer. A Risk Management Committee was established to identify significant risks and designate personnel responsible for risk management. The committee prepares and implements countermeasures to avoid occurrence or minimize the impact of risks and reports the results to the Board of Directors as needed. Risks related to sustainability are evaluated by the Sustainability Committee and managed jointly with the Risk Management Committee. In addition, the Group analyzes scenarios regarding climate change and will disclose risks and opportunities, as well as relevant initiatives.